Cree Inc. ( CREE - Free Report) , a Zacks Ranked #5 (Strong Sell) company is a market-leading innovator and manufacturer of semiconductors that enhance the value of solid-state lighting, power and communications products by significantly increasing their energy performance and efficiency. Key to Cree's market advantage is its world-class materials expertise in silicon carbide and gallium nitride for chips and packaged devices that can handle more power in a smaller space while producing less heat than other available technologies, materials and products. Recent Earnings Results Last week, management announced both F4Q17 and FY 17 results and overall it was a mixed bag. First the positives, both the LED and Wolfspeed businesses did better than expected on a year over year (YoY) basis; LED product revenues were up almost 10% while Wolfspeed revenues were up +8.4%. Now the negatives; on a YoY basis the company saw declines in revenues -8%, non-GAAP net income -78.9%. On a fiscal year basis for 2017 revenues were down -9% while non-GAAP net income was down -43.2%. The big drag on the company was the lighting segment which saw revenues fall by almost -21% YoY, due to increased competition. This is not just a quarterly event as the segment has been underperforming for over a year. Another issue facing the company is the search for a new CEO as the previous CEO announced his departure in May. But there has been little to no movement on this front. Further, the current management team announced significantly increased capex plans; rising to an estimated $220 million from just $87 million in FY 2017. This increase in spending is almost solely focused on the Wolfspeed segment with the goal of doubling its capacity over the next 12 months. Given the increased expenditures, management was forced to reduce F1Q17 revenue guidance from an expected consensus of $361 million to a range of $353-367 million. But EPS is expected to be more negatively impacted by this spending as non-GAAP EPS fell from a consensus of $0.11 to a range of $0.02-0.06. Lastly, non-GAAP gross margins will also be negatively impacted as they were lowered by almost a full percentage point; from 29.8% to almost 29%. As you can see from the Price and Earnings Consensus graph below, the stock price and future earnings estimates have been falling for quite some time.